Sudden Fall of Currency Value, reaches 1247 won

Chairman of Bank of Korea (BOK) implied possibility of involving in foreign exchange market as value of Won against dollar is depreciating daily (rise of value of won)

Japan set out to defend currency exchange using drastic measures such as BOJ (Bank of Japan) is involved in market directly and is buying dollars, as Yen against Dollar dropped to 123 yen line.

Korea government tried to stop falling tendency through speech of possibility of involving in market by policy authorities, but, there was neither any positive impact nor there are any other methods to stop fall in currency exchange except involving in market like Japan.

On 22nd won against dollar closed at 1247.2 won which is a drop of 7.4 won than the pervious day.

Won-dollar exchange showed a heavy fall till 1241.8 won once, and it rose due to news that Japanese government is involving itself in foreign exchange market.

Won-dollar exchange had risen till 1332 won on 12th April, but it fell down 6.7 percent (84.8 won) in 40 days.

Chairman of BOK, Park Seung said at foreign press conference on 22nd, “ it is possible to involve in market in case value of currency drops continuously”, and “ it is not time for implementing such thing”.

BOK concerned said related to this, “he said principle of foreign exchange market” and “implied that more time is needed to carry out the real involvement in market”.

International policy advisor in Ministry of Finance and Economy, Kim Yong-Duk stated the plan to establish co-operation system with Japan, “ we plan to meet Japanese vice-minister of Finance, Guroda, in Beijing and we would like to talk with Japanese government frequently with regard to currency exchange matter”.

He also said, “ we are concerned that speed of fall in currency exchange is too fast” and “ we will look in to the involvement of speculation, and if necessary, we will take various measures.”

Joong-Hyun Park Do-Young Kim sanjuck@donga.com nirvana1@donga.com